Pharoah Company purchases sails and produces sailboats. It currently produces 1,220 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Pharoah purchases sails at $261 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $96 for direct materials, $80 for direct labor, and $90 for overhead. The $90 overhead is based on $78,080 of annual fixed overhead that is allocated using normal capacity. The president of Pharoah has come to you for advice. "It would cost me $266 to make the sails, she says, but only $261 to buy them. Should I continue buying them, or havelmissed something?" (a) Your answer is partially correct. Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) Net Income Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) Make Sails Buy Sails Net Income Increase (Decrease) Direct material 96 ta $ 96 Direct labor 80 80 90 Variable overhead 90 90 261 261 Purchase price $ $ 261 78080 77810 Total unit cost Should Pharoah make or buy the sails? make the sails. Pharoah should E G. ENG 12C Cloudy^